The rapid growth in ecommerce throughout the world has brought more opportunities for online fraud. And, although the fraud-to-transaction ratio hasn’t skyrocketed, the money lost to the bad actors is significant. Ecommerce losses tied to online payment fraud topped USD20 billion globally in 2021, up 14% from the previous year.
There are numerous tools available on the market aimed at maintaining security for your online store. Some are laser-focused on certain exploit parameters and layers, while others have more broad applications to fight off fraudsters. But no matter the tools you use, when it comes to mitigating fraud for your ecommerce site, it’s important to understand the entire flow – even if you’re only responsible for a portion of it.
We’re diving into five focal points to maintain a layered approach to security.
Simply put, knowing who your website visitors are is crucial. As a first step, consider and understand your business model and why it attracts both valid visitors and criminal entities. There are many tools available to monitor, analyse, and apply rules to your web traffic to understand the identity of who is visiting your site. Having a good view of who is entering your site – and their frequency of visits – is very important to your first layer of defense and analysis.
Monitoring changes to shopper information, saved payment methods, login attempts, and other account data in detail is crucial for understanding how visitors interact with your site. Machine learning and other fraud mitigation tools can help identify different devices attempting to login or create new user accounts and recognise potential fraudsters with differing behaviour.
After determining who is on your site and what they are doing, the focus should be on why they are on your site. Understanding your valid customer base, how they find your site and interact with it, and their intent can help you recognise common consumer behaviour versus fraudulent intent.
Did you recently launch a new product? Is your site’s volume volatility seasonal? Has your marketing team used different tactics to bring customers to your site? Are customers attempting to abuse your special offers policy? Shoppers end up on your site for a wide variety of reasons. Understanding the ‘why’ will help your brand be better prepared to give valid customers a good experience while fighting off fraudsters.
Maintaining good reporting and recognising when your site visitors are successful or failing can lead you not only to insights for bad behavior, but potential consumer friction points. Are you seeing numerous e-wallet attempts, but not order submissions? Maybe there’s a technical issue with this payment method – or maybe this is due to fraudulent behaviour. Are you getting a high rate of consumers failing to submit accurate CVV security codes? This could lead to a higher rate of false positives, meaning good customers are incorrectly mistaken as fraudulent. Monitoring the customer experience throughout your entire website, including the checkout and payment flow, is key to ensure satisfaction and security.
No matter what you’re selling online, a holistic, multi-layered approach to security is your brand’s best bet to fight fraud and keep your site secure. Continuously adapting and innovating is key as fraudsters will continue to do the same.
Tim Laudenbach is Digital River’s Director of Risk Management and Fraud Operations, responsible for developing and deploying customized fraud strategies for client organizations as well as managing day-to-day operational volumes. Tim has an extensive background helping companies manage risk with industry-leading techniques and technology. He uses his in-depth knowledge of fraud and chargeback solutions, and extensive experience setting up authorization and settlement strategies, to minimize expenses and limit exposure for leading brands.
With more than 25 years of experience, Digital River has mastered global commerce. An industry disrupter from the start, our Global Seller Services simplify global commerce expansion to help companies of all sizes grow their revenue by offering shoppers a localised buying experience in OVER 200 DESTINATIONS worldwide. Using our flexible APIs that combine payments, tax, fraud, and compliance into a single integrated solution, brands INCREASE CONVERSIONS, turning browsers into buyers as they virtually sell anything to anyone, anywhere in the world. The CHOSEN PARTNER of more than 3,500 global brands across the Americas, Europe, and Asia, Digital River is global commerce simplified.
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